Poor practices swallow $160 million in revenue

PUBLISHED : Thursday, 18 November, 1999, 12:00am
UPDATED : Thursday, 18 November, 1999, 12:00am

The Vocational Training Council was criticised for poor management practices that led to at least $160 million in lost revenue.


The Audit Commission questioned a host of council practices, including delays in cutting staff gratuity rates, which had cost taxpayers $64 million.


Although six of seven local tertiary institutions had cut their contract gratuity rate from 25 per cent to 15 per cent by March 1996, the council did not adjust its rate until March this year.


The council was also found to have changed staff benefits or implemented plans without first seeking government approval.


A total of $4 million was paid to staff in lieu of leave in the past year, and design changes added $85 million to the estimated cost of staff quarters in Chai Wan.


The auditor said the scheme by which staff cashed in leave breached the Government's subvention principle.


A total of $10 million in rent was lost because 15 of the 100 senior staff quarters were vacant in June.


A senior staff member was offered a monthly pay package of $145,000, with housing and other fringe benefits, but was not required to live in the quarters.


A $11 million swimming pool at the Chai Wan Technical College staff quarters was rarely used.


Three of 20 contract agreements signed by the council last year were not put to open tender and additional quotations had not been secured in 28 of 125 direct purchases between July and September last year.


The auditor also cast doubt on repayment arrangements for a staff loan scheme. Most borrowers only repaid monthly interest, with the principal remaining outstanding until retirement.


Council member Tam Yiu-chung, an Exco member, said he would discuss the claims with council executive director Professor Lee Ngok.


The council said last night that its practice on contract gratuities was in line with policy. It would take action to ensure efficient use of funds.